General government deficit (net borrowing) was £82.2 billion in the calendar year 2015 (4.4% of Gross Domestic Product (GDP)), a decrease of £20.0 billion compared with the calendar year 2014 (when it was 5.6% of GDP).
General government gross debt was £1,663.0 billion at the end of 2015 (89.2% of GDP), an increase of £60.8 billion compared with the end of 2014 (when it was 88.2% of GDP).
This release is fully consistent with the latest data transmission on UK government deficit (or net borrowing) and debt that the UK and other European Union (EU) member states are required to report quarterly to the European Commission.
The figures for 1997 onwards in this statistical bulletin are fully consistent with the data published in the Public Sector Finances statistical bulletin of 22 March 2016.Back to table of contents
The EU Government Deficit and Debt statistical bulletin is published quarterly in January, April, July and October each year, to coincide with when the UK and other European Union (EU) member states are required to report on their deficit (or net borrowing) and debt to the European Commission.
Article 126 of the Treaty on the Functioning of the European Union (EU) obliges member states to avoid excessive budgetary deficits. The Protocol on the Excessive Deficit Procedure, annexed to the Maastricht Treaty, defines 2 criteria and reference values with which member states’ governments should comply. These are:
a deficit (net borrowing) to Gross Domestic Product (GDP) ratio of 3%
a debt to GDP ratio of 60%
The deficit is a measure of how much the government has to borrow to cover its expenditure once revenue has been netted off, for this reason it is also known as net borrowing. The monetary values quoted are in current prices, that is, they represent the price of borrowing in the year to which they relate without any adjustments for inflation. Thus for comparisons over time the figures as a percentage of GDP (also measured in current prices) are used to provide a comparable time series.
The source data, and therefore the debt and deficit figures published in this bulletin (for the time period 1997 onwards), are the same as those published in the Public Sector Finances: February 2016 statistical bulletin published on 22 March 2016. There are 2 main differences between the main borrowing and debt measures published in the Public Sector Finances and the deficit and debt figures published in this bulletin:
this bulletin includes only debt and deficit recorded to central and local government, whereas the UK Public Sector Finances’ measures also include the debt and deficit of other public sector bodies
this bulletin reports gross debt, that is, the financial liabilities (that is, debt securities, loans and deposits) of central and local government, whereas the Public Sector Finances’ headline measure is net debt, calculated as financial liabilities less liquid assets (that is, official reserve assets and other cash or cash-like assets)
This section provides the latest headline data for deficit (net borrowing) and debt, and supporting information.
The Public Sector Finances: February 2016 statistical bulletin published estimates for the headline measures of general government net borrowing and general government gross debt on 22 March 2016. This bulletin provides further information of these estimates and presents them in the context of the European Union (EU) requirements.
Table 1 shows the headline measures on a calendar year and financial year basis both as £ billion values and as a percentage of Gross Domestic Product (GDP).
Table 1: Government deficit and debt
|UK, calendar years 2008 to 2015 and financial year ending March 2008 to financial year ending March 2015|
|as % GDP||5.0||10.7||9.6||7.7||8.3||5.6||5.6||4.4|
|as % GDP||51.7||65.7||76.6||81.8||85.3||86.2||88.2||89.2|
|as % GDP||3.0||6.7||10.8||9.1||7.6||7.5||5.9||5.0|
|as % GDP||42.7||54.8||71.4||77.0||82.6||84.6||86.6||87.4|
|Source: Office for National Statistics|
|1. 2014/15 refers to the financial year ending March 2015|
|2. At face values|
|3. Unless otherwise stated|
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General government deficit
In the calendar year 2015, the UK government deficit (net borrowing) was £82.2 billion (4.4% of GDP). This represents a decrease of £20.0 billion since 2014 and is the lowest value since 2007 when it was 3.0% of GDP (£44.3 billion).
In the financial year ending March 2015, the UK government deficit (net borrowing) was £91.1 billion (5.0% of GDP). This represents a decrease of £12.2 billion since the financial year ending March 2014 and is the lowest value as a percentage of GDP since the financial year ending March 2008 when it was 3.0% of GDP (£45.6 billion). However, the deficit remains above the Maastricht reference value of 3.0%.
The long-term general government deficit (net borrowing) as a percentage of GDP is illustrated in Figure 1.
General government gross debt
At the end of the calendar year 2015, UK government gross debt was £1,663.0 billion (89.2% of GDP). As a proportion of GDP, this is the 13th consecutive annual increase.
At the end of the financial year ending March 2015, UK government gross debt was £1,601.3 billion (87.4% of GDP). This represents an increase of £79.9 billion since the end of the financial year ending March 2014. The general government gross debt first exceeded the 60% Maastricht reference value at the end of the financial year ending March 2010 when it was 71.4% of GDP (£1,074.0 billion).
The long-term general government gross debt as a percentage of GDP is illustrated in Figure 2.
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The last edition of this bulletin in January 2016, included a number of methodological changes. This edition includes 1 methodological change relating to the data coverage in the bulletin:
Additional central government revenue
A program of quality assurance has identified a number of additional sources of central government department revenue that were not previously being reported. These are now included in the accounts and impact on central government deficit from 2008, with the combined effect in 2014 being a downward revision to deficit of £0.8 billion.
In addition to this methodological change, some of the more significant recent events that impact on the reported government deficit and debt are summarised below. For more information on the methodological changes and events impacting these statistics, please see the relevant section of the Public Sector Finances: February 2016 statistical bulletin.
Bank of England Asset Purchase Facility Fund
The Chancellor announced on 9 November 2012 that it had been agreed with the Bank of England to transfer to the Exchequer the excess cash in the Asset Purchase Facility Fund. In line with European guidance (from Eurostat) the amount of cash that reduces deficit is limited by the entrepreneurial income earned by the Bank of England in the previous year.
In the calendar year 2015, there was a £8.7 billion transfer from the Asset Purchase Facility to HM Treasury. The Bank of England entrepreneurial income for 2014 was calculated as £12.4 billion; as the amount of dividend transfers made did not exceed the entrepreneurial income, the impact of these transfers was to reduce deficit by £8.7 billion.
Lloyds Banking Group
On 17 September 2013 the UK government began selling part of its share holding in Lloyds Banking Group. The sale of the shares does not directly impact on general government deficit or general government gross debt because it is purely a financial transaction exchanging equity for cash.
The cash received from the September 2013 sale of the government’s 6% stake (at 75p a share) was £3.2 billion.
A further sale was held on 23 to 24 March 2014 of a 7.5% stake, which raised £4.2 billion.
Following the March 2014 sale of shares, Lloyds Banking Group was reclassified from being a public financial corporation to a private financial corporation.
Share sales in 2015
Further share sales have occurred in 2015. These are as follows:
- the sale of the government’s 40% stake in the cross-Channel train operator Eurostar raised £757 million in May
- the sale of half of the government’s retained shareholding in Royal Mail (a 15% stake) raised £750 million in June
- the sale of 5.4% of the government’s stake in the Royal Bank of Scotland raised £2.1 billion in August
- the ongoing sale of shares in Lloyds Banking group has raised a total of £8.7 billion throughout 2015
Under the Excessive Deficit Procedure all European Union (EU) member states report their latest detailed deficit and debt information to the European Commission twice a year. Supporting statistical information, including deficit and debt values, are reported quarterly. Both the biannual and quarterly returns are published by Eurostat (the European statistical agency).
Both the debt and deficit figures in this statistical bulletin will be published by Eurostat on 21 April 2016. More detailed statistics on quarterly debt of European member states will be published on 22 April 2016.
The tables in this bulletin present the UK government debt and deficit position at the end of both the financial and calendar years. The UK, uniquely within the EU, is assessed against the deficit and debt on a UK financial year basis (that is, April to March). In March 2016, the UK provided to Eurostat first estimates for the calendar year 2015 and revised estimates for the financial year ending in March 2015. Estimates for the financial year ending in March 2015 were first provided in June 2015.
The UK figures may be compared with those of other EU member states on the Government Finance Statistics section of the Eurostat website.
The latest UK government deficit and debt figures exceed the reference values set out in the Protocol on the Excessive Deficit Procedure. According to the latest deficit and debt figures published on 22 January 2016, 13 member states had a deficit exceeding the 3% of GDP reference value in 2014 and 16 member states had gross debts exceeding the 60% of GDP reference value as at the end of 2014.
While the main statistics provided to Eurostat are those of general government consolidated gross debt and general government net borrowing (or deficit), supplementary government finance statistics are also supplied by member states. A full set of government finance tables provided by the UK to Eurostat in March 2016 are included in this release.Back to table of contents
This is the first time that deficit and debt figures for the calendar year 2015 have been reported in this statistical bulletin series; it is the fifth time that deficit and debt figures for 2014 have been reported. Since the last publication of the EU Government Deficit and Debt Return in January 2016, the deficit in the calendar year 2014 has been revised down by £843 million (0.8%) and debt as at the end of 2014 has been revised down by £3 million (0.0%).
Table M8R presents the revisions to main aggregates since the last publication of the EU Government Deficit and Debt Return in January 2016. Revisions to the data are consistent with revisions incorporated within the Public Sector Finances statistical bulletin.
Main methodological changes and recent events that affect data movements are described under “Recent events and methodological changes”.Back to table of contents
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